[hso]

Good morning all,

Please can someone tell me how to value my business if i were to sell. Just an idea of value would be great.

turnover is a minimum of £200,000 16 contracts, 30 part time staff, trading for 2 years. All contracts just signed for a minimum 12 months then rolling contract thereafter...

Is there a standard way to value ? i.e. based on turnover....

Just weighing up my options and an idea of value...would assist greatly.

no borrowing, all equipment bought and paid for...

[Small but perfectley formed]

The value is based on net profits + any assets

[Angel eduardo]

Let me know if you decide to sell and please confirm where you contracts are?

[hso]

will do, thank you 

[steven collier]

Hi, a "rule of thumb" assessment of the selling cost is 1.5 (one and a half)  times the net profit.

So for example if your net profit was £40k then an asking price of £60k would be  a reasonable start point.

[Phild]

Depends who you are selling it to. An owner-operator or as an 'add-on'? You are probably making £40 - £50k gross and this is what a larger company might pay you in 2 - 3 stage payments. This would include all the basic kit on the jobs, no TUPE transfers except the operatives and a non trade agreement. It's not a fortune but then again the business is probably less than a third of one of the national's reps sales target.

On the other hand as an owner operator business with you doing a hands on transfer will generate more cash for you but probably paid over a longer time.

The days of pound for pound turnover are long gone unless you have been sucked in by some of the business sales companies who spend fortunes on marketing seminars to bring in owner operators to flog their businesses.

Cynical, Moi?

Best of luck. Spend time learning about the buyer / seller! Everyone has a track...record for good or bad.

PhilD

[Danny Guest]

Good morning all,

Please can someone tell me how to value my business if i were to sell. Just an idea of value would be great.

turnover is a minimum of £200,000 16 contracts, 30 part time staff, trading for 2 years. All contracts just signed for a minimum 12 months then rolling contract thereafter...

Is there a standard way to value ? i.e. based on turnover....

Just weighing up my options and an idea of value...would assist greatly.

no borrowing, all equipment bought and paid for...

I know its off topic but i have a few questions for you.

- How did you obtain the work (canvassing, telesales, letters of introduction, other advertising)
- Did you register for VAT from the start or was it worked towards
- What types of premises does your business target i.e offices, industrial, showrooms etc

The answers to these questions will help greatly in my business plan

Thanks in advance
Danny

[hso]

Thank you for your responses, most helpful, It all started with me going and buying a van and coming back with a van and a cleaning contract....then it just rolled along, word of mouth mostly.

I have tried the email marketing route but only picked up one contract through that to be honest. Ive also tried the leaflet drops and that gained me one job.

I have put adverts on places such as gumtree and local forums and that seems to generate the phone calls.

I have even called into local businesses and introduced myself and that I got to say was a success too.

We target offices and schools mainly

We registered for VAT only because we were awarded a large contract that unfortunately fell through a week before commencement ! I remained vat registered and it really took only a few months in other work to get over the vat threshold anyway. I felt it gave a better impression to clients to look a larger company.

I do feel that once you get your foot in the door it seems to open new ones.......



 

[Danny Guest]

Thank you for your responses, most helpful, It all started with me going and buying a van and coming back with a van and a cleaning contract....then it just rolled along, word of mouth mostly.

I have tried the email marketing route but only picked up one contract through that to be honest. Ive also tried the leaflet drops and that gained me one job.

I have put adverts on places such as gumtree and local forums and that seems to generate the phone calls.

I have even called into local businesses and introduced myself and that I got to say was a success too.

We target offices and schools mainly

We registered for VAT only because we were awarded a large contract that unfortunately fell through a week before commencement ! I remained vat registered and it really took only a few months in other work to get over the vat threshold anyway. I felt it gave a better impression to clients to look a larger company.

I do feel that once you get your foot in the door it seems to open new ones.......



 

Good luck and thank you for a good post

[Mike_Boxall]

One of the things you need to be clear about is the difference between gross profit and net profit. Net profit is what you're left with after all your overheads are taken out including a reasonable and realistic amount for your own time. With 30 staff on 16 contracts I suspect much of the business depends on you and would be difficult to transfer to a new owner. In terms of value it's really a case of finding the right buyer at the right time.

In any case, good luck with it.

Regards

Mike

[Scotbrite]

One of the things i find against the value of your (any) business is this : you try & get your profit level down as low as possible (for tax reasons), legitimately of course !! this does not do you any favours if you want to sell & i doubt that a prospective buyer would listen to your reasons. I am in a similar position to "hso" & i think i would struggle to get a realistic value for my business which is profitable
Cheers
Ron

[hso]

I agree, a company that valued mine based it totally on the contract values, the length of contract, the turnover, my margin and quantity of staff. They did not ask my profit / loss and offered me £90k
I guess if they are adding to their own portfolio the overheads are far less as they already have these covered.... Offices, managers, insurances etc.

So with a smaller company the profit is going to be much lower until more business is acquired and overheads spread further.

Does this make sense ?